Understanding County Court Judgements - CCJs

What is a CCJ?

A County Court Judgement (CCJ) is the term used for a judgement issued by the court, on behalf of someone who is owed money, against a person or company for the debt owed. The courts then set up an affordable repayment plan based on the debtor’s financial circumstances. A CCJ is generally the last resort used by a creditor to recover a debt, demanding letters and phone calls are usually the first methods of approach. If a CCJ is paid in full within 30 days of the date of the judgement it won’t appear in the credit register However as CCJ’s are a matter of public record, they are in fact catalogued and held for 6 years with the Registry Trust. Should a judgement be settled after the 30 day period, it will then be entered into public record and this in turn will affect your credit rating.

Unfortunately the effect a CCJ has on your credit record is that you will find it difficult in some cases for certain high street banks and building societies to agree to offer you a mortgage. You will of course still be able to obtain a mortgage but the chances are you will become restricted to those companies who specialise in bad credit mortgages. The rates offered tend to be much higher which ultimately means a higher monthly mortgage payment.

In most cases a CCJ is the result of failure to make or keep up with an agreed payment arrangement and are used by the creditor, by applying to the court, once a default notice has been issued. The typical debt type which leads to a CCJ is any form of an unsecured debt.

Once the Claimant has applied for a claim form you will be issued with a stamped copy giving details of the debt in question. You should also receive a Defence Form, which you should complete if you disagree with the amount of the claim, an Admission Form to complete if you agree to actually owing the amount to the Claimant, and thirdly an Acknowledgment of Service form. This form should only be completed and returned if you require extra time. 28 days is usually allocated in place of 14.

If of course you are unable to make the payments set out by the court, the CCJ will be reviewed and changed in light of your particular financial circumstances. However if you are able to afford the payments it is imperative that you continue making them regularly. Failure to do so may result in hefty actions been taken against you such as the issuing of Bailiffs or an Attachment of Earnings Order, where the court is permitted to deduct money from your income. Worse still is the issuing by the court of a Charging Order to be placed on your property. Here if failure to make a repayment occurs, any unsecured debt then becomes secured debt and the court then has the right to impose the sale of the property in order to pay off the creditor.

Any CCJ will remain on your credit file for 6 years but the mere fact that contractual payments were not kept up in the first instance will already have affected your credit rating. The only way a CCJ will not appear on your credit file is if you pay any debt in full within 30 days. Should you manage to pay off a CCJ within 6 years you are then entitled to a ‘letter of satisfaction’ from the issuing County Court, which you can send to the credit reference agencies who will mark the entry as ‘satisfied’ on your credit file. This is particularly favourable if you intend to apply for a mortgage.

Published on September 22, 2007